Falling corn prices in Brazil’s largest agricultural-producing state, Mato Grosso, have been underpinning the state’s corn crush margins and boosted the ratio between freight costs and farm gate corn prices, the state’s agriculture institute Imea said late Monday, May 29.
The backdrop in corn prices has been favoring Mato Grosso’s corn crush, with gross margins at the state’s corn ethanol plants up 31% on the month to BRL725 per tonne ($143 per tonne).
“The prospect of a record corn crop is expected to pressure prices lower further to the benefit of ethanol plants’ crush margins and the increase in investments in the sector in the state,” Imea said.
Freight costs subsided somewhat from April to May, but the decline in corn prices pushed the ratio between the freight from inland farms to the port of Santos and farm gate corn prices up to 59%, three percentage points higher on the month and 24 points higher on the year.
“Over the next weeks, with the progress of corn harvest works, the demand for trucks should increase while corn prices decline due to the higher availability, which should further increase the ratio between freight costs and corn prices,” Imea said.
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Soy meal and soy oil prices edged lower week on week and year on year in Mato Grosso in the week to May 26.
Local soy meal prices were 8% lower compared with the same week in the previous year, while soy oil prices fell 49% during the same period.